Under the futures and options (F&O) segment, nine stocks were banned from trade on Thursday, September 14, by the National Stock Exchange (NSE). The securities banned for the F&O trade are Delta Corp, Hindustan Copper, India Cements, Indian Energy Exchange (IEX), Indiabulls Housing Finance, Manappuram Finance, National Aluminium, REC Ltd and Steel Authority of India Ltd (SAIL).
Derivative contracts of these stocks were banned as the open market interest for these securities has crossed 95% of the market-wide position limit (MWPL) set by the exchanges. The MWPL is the maximum number of contracts that can be opened at any particular time.
On September 13, IEX saw its open interest reach 90.4% of its MWPL. The open interest for the derivative contracts of Delta Corp stood at 81.6% of its MWPL at the closing time on Wednesday, while that of Hindustan Copper was 81.4%. National Aluminium saw the open interest for its F&O contracts touch 89.9%.
Manappuram and SAIL were retained on the list as the open interest as a percentage of the MWPL of their F&O contracts stood at 87% and 81.6%, respectively, on September 13. The combined open interest for the derivatives contracts of Indiabulls Housing and India Cements stood at 91.5% and 83.6% of their MWPL on Wednesday.
All the above securities were retained on the list from Wednesday, September 13. REC Ltd was added to the list on Thursday as the open interest of its F&O contracts touched 100.1%.
The ban will be lifted once the position falls below 80%. Traders will get penalised for buying or selling these securities. They will be available for trading in the cash market.
The open interest for the F&O contracts of BHEL and Chambal Fertilizers declined below the 80% limit to 78.1% and 75.6%. They, hence, were exited from the list on Thursday.
The National Stock Exchange updates the list of securities on the F&O ban list daily. This list serves as a guide for traders and investors in the market. Traders who trade in indices do not encounter a situation of security ban.